UNITED STATES OF AMERICA
BEFORE THE
SECURITIES AND EXCHANGE COMMISSION
SECURITIES ACT OF 1933
Release No. 7564 / August 18, 1998
SECURITIES EXCHANGE ACT OF 1934
Release No. 40332 / August 18, 1998
ADMINISTRATIVE PROCEEDING
File No. 3-9491
______________________________
:
In the Matter of :
:
IRA A. BOSHNACK :ORDER MAKING FINDINGS AND
ANDREW S. FRIEDMAN :IMPOSING REMEDIAL SANCTIONS AND A
DOUGLAS C. MILLER :CEASE-AND-DESIST ORDER
:
Respondents. :
______________________________:
I.
The Securities and Exchange Commission ("Commission") instituted
public administrative and cease-and-desist proceedings pursuant
to Section 8A of the Securities Act of 1933 ("Securities Act")
and Sections 15(b), 19(h) and 21C of the Securities Exchange Act
of 1934 ("Exchange Act") against Respondents Ira. A. Boshnack
("Boshnack"), Andrew S. Friedman ("Friedman") and Douglas C.
Miller ("Miller") on December 1, 1997.
II.
Respondents Boshnack, Friedman and Miller have each submitted
Offers of Settlement ("Offers") to the Commission, which the
Commission has determined to accept. Solely for the purpose of
this proceeding and any other proceeding brought by or on behalf
of the Commission, or in which the Commission is a party, and
without admitting or denying the findings contained herein,
except as to the jurisdiction of the Commission over Respondents
Boshnack, Friedman and Miller and over the subject matter of this
proceeding, which are admitted, Respondents Boshnack, Friedman
and Miller by their Offers consent to the entry of findings,
remedial sanctions and cease-and-desist order set forth below.
III.
On the basis of this Order Making Findings and Imposing Remedial
Sanctions and a Cease-and-Desist Order ("Order") and the Offer
submitted by Respondent Boshnack, the Commission finds that:
A.From March 1993 to October 1995, Respondent Boshnack was a registered
representative ("RR") at the now defunct registered broker-dealer Stratton
Oakmont, Inc. ("Stratton"). In March 1994, Respondent Boshnack became a
principal at Stratton. Respondent Boshnack is 48 years old and resides in
Coconut Creek, Florida.
B.On December 21, 1992, Respondent Miller, posing as Respondent Boshnack,
sat for the Series 7 licensing exam administered by the National
Association of Securities Dealers, Inc. ("NASD") and obtained a passing
score on that exam on Respondent Boshnack's behalf. As a result of
Respondent Miller's obtaining a passing grade on the Series 7 exam on
Respondent Boshnack's behalf, Respondent Boshnack became an RR at Stratton
and effected and solicited securities transactions.
C.On March 14, 1994, Respondent Miller, posing as Respondent Boshnack, sat
for the Series 24 licensing exam administered by the NASD and obtained a
passing score on that exam on Respondent Boshnack's behalf. As a result of
Respondent Miller's obtaining a passing grade on the Series 24 exam on
Respondent Boshnack's behalf, Respondent Boshnack became a principal at
Stratton and supervised registered representatives and other employees
effecting and soliciting securities transactions.
D.During the period from March 1993 through October 1995 ("Relevant
Period"), Respondent Boshnack made baseless price predictions in order to
induce at least four customers to purchase securities of companies for
which Stratton had underwritten the initial public offerings, including,
but not limited to, the securities of Dualstar Technologies, Inc.
("Dualstar"), Select Media Communications, Inc. ("Select Media") and/or
United Leisure Corporation ("United Leisure").
E.During the Relevant Period, Respondent Boshnack made unauthorized
purchases of securities, including, but not limited to, the securities of
Childrobics, Inc., IDM Environmental Corporation, Master Glaziers Karate
International, Inc. ("Master Glazier"), Octagon, Inc. ("Octagon") and
Select Media, in the accounts of at least four customers.
F.During the Relevant Period, Respondent Boshnack fraudulently held himself
out to all of his customers as an RR and failed to disclose that he had not
passed the Series 7 exam.
Violations
G.As described in paragraphs III. B. and III.C. above, during the period
from April 1995 through October 1995, Stratton violated, and Respondent
Boshnack willfully aided and abetted and caused the violations by Stratton
of, Section 15(b)(7) of the Exchange Act and Rule 15b7-1 thereunder, in
that Stratton effected transactions in, or induced the purchase or sale of,
securities while the natural persons associated with Stratton who effected
or were involved in effecting such transactions were not registered or
approved in accordance with the standards of training, experience,
competence, and other qualification standards (including but not limited to
submitting and maintaining all required forms, paying all required fees,
and passing any required examinations) established by the rules of the NASD
of which Stratton was a member.
H.As described in paragraphs III.D., III.E. and III.F above, during the
Relevant Period, Respondent Boshnack willfully violated Section 17(a) of
the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5
thereunder, by using any means or instruments of transportation or
communication in interstate commerce, or by use of the mails, or of any
facility of any national securities exchange or any means or
instrumentality of interstate commerce, in the offer or sale or in
connection with the purchase or sale of securities in that he directly or
indirectly employed devices, schemes or artifices to defraud; obtained
money or property by means of, or otherwise made, untrue statements of
material facts or omitted to state material facts necessary in order to
make the statements made, in the light of the circumstances under which
they were made, not misleading; or engaged in transactions, practices or
courses of business which operated as a fraud or deceit upon the purchasers
or upon other persons.
IV.
On the basis of this Order and the Offer submitted by Respondent
Friedman, the Commission finds that:
A.From January 1993 to October 1995, Respondent Friedman was an RR at
Stratton. In December 1994, Respondent Friedman became a principal at
Stratton. Respondent Friedman is 28 years old and resides in Rosyln, New
York.
B.On April 6, 1995, Respondent Friedman, posing as Eric S. Blumen
("Blumen"), sat for the Series 24 licensing exam administered by the NASD
and obtained a passing score on that exam on Blumen's behalf. As a result
of Respondent Friedman's obtaining a passing grade on the Series 24 exam on
Blumen's behalf, Blumen became a principal at Stratton and supervised
registered representatives and other employees effecting and soliciting
securities transactions.
C.During the Relevant Period, Respondent Friedman made baseless price
predictions in order to induce at least six customers to purchase
securities of companies for which Stratton had underwritten the initial
public offerings, including, but not limited to, the securities of Dualstar
and/or United Leisure.
D.During the Relevant Period, Respondent Friedman made unauthorized
purchases of securities, including, but not limited to, the securities of
Master Glaziers, Octagon and Solomon-Page Group, Ltd., Inc., in the
accounts of at least three customers.
Violations
E.As described in paragraph IV. B. above, during the period from April 1995
through October 1995, Stratton violated, and Respondent Friedman willfully
aided and abetted and caused the violations by Stratton of, Section 15(b)(7)
of the Exchange Act and Rule 15b7-1 thereunder, in that Stratton effected
transactions in, or induced the purchase or sale of, securities while the
natural persons associated with Stratton who effected or were involved in
effecting such transactions were not registered or approved in accordance
with the standards of training, experience, competence, and other
qualification standards (including but not limited to submitting and
maintaining all required forms, paying all required fees, and passing any
required examinations) established by the rules of the NASD of which Stratton
was a member.
F.As described in paragraphs IV.C. and IV.D. above, during the Relevant
Period from March 1993 through October 1995, Respondent Friedman willfully
violated Section 17(a) of the Securities Act and Section 10(b) of the
Exchange Act and Rule 10b-5 thereunder, by using any means or instruments
of transportation or communication in interstate commerce, or by use of the
mails, or of any facility of any national securities exchange or any means
or instrumentality of interstate commerce, in the offer or sale or in
connection with the purchase or sale of securities in that he directly or
indirectly employed devices, schemes or artifices to defraud; obtained
money or property by means of, or otherwise made, untrue statements of
material facts or omitted to state material facts necessary in order to
make the statements made, in the light of the circumstances under which
they were made, not misleading; or engaged in transactions, practices or
courses of business which operated as a fraud or deceit upon the purchasers
or upon other persons.
V.
On the basis of this Order and the Offer submitted by Respondent
Miller, the Commission finds that:
A.From March 1993 to October 1994, Respondent Miller was an RR at Stratton.
Respondent Miller is 30 years old and resides in Metairie, Louisiana.
B.On December 21, 1992, Respondent Miller, posing as Respondent Boshnack,
sat for the Series 7 licensing exam administered by the NASD and obtained a
passing score on that exam on Respondent Boshnack's behalf. As a result of
Respondent Miller's obtaining a passing grade on the Series 7 exam on
Respondent Boshnack's behalf, Respondent Boshnack became an RR at Stratton
and effected and solicited securities transactions.
C.On March 14, 1994, Respondent Miller, posing as Respondent Boshnack, sat
for the Series 24 licensing exam administered by the NASD and obtained a
passing score on that exam on Respondent Boshnack's behalf. As a result of
Respondent Miller's obtaining a passing grade on the Series 24 exam on
Respondent Boshnack's behalf, Respondent Boshnack became a principal at
Stratton and supervised registered representatives and other employees
effecting and soliciting securities transactions.
Violations
D.As described in paragraphs V.B. and C. above, during the period from
March 1993 through October 1995, Stratton violated, and Respondent Miller
willfully aided and abetted and caused the violations by Stratton of,
Section 15(b)(7) of the Exchange Act and Rule 15b7-1 thereunder, in that
Stratton effected transactions in, or induced the purchase or sale of,
securities while the natural persons associated with Stratton who effected
or were involved in effecting such transactions were not registered or
approved in accordance with the standards of training, experience,
competence, and other qualification standards (including but not limited to
submitting and maintaining all required forms, paying all required fees,
and passing any required examinations) established by the rules of the NASD
of which Stratton was a member.
VI.
In view of the foregoing, the Commission deems it appropriate and
in the public interest to accept the Offers submitted by
Respondents Boshnack, Friedman and Miller and impose the remedial
sanctions and cease-and-desist order specified therein.
Accordingly, IT IS ORDERED that:
A.Respondents Boshnack, Friedman and Miller each cease and
desist, pursuant to Section 21C of the Exchange Act, from causing
any violation and any future violation of Section 15(b)(7) of the
Exchange Act and Rule 15b7-1 thereunder.
B.Respondents Boshnack and Friedman each cease and desist,
pursuant to Section 8A of the Securities Act and Section 21C of
the Exchange Act, from committing or causing any violation and
any future violation of Section 17(a) of the Securities Act and
Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder.
C.Effective immediately, Respondents Boshnack, Friedman and
Miller each be, and hereby are, barred from association with any
broker, dealer, investment company, investment adviser or
municipal securities dealer.
D.Respondent Boshnack pay, within three days of the entry of this
Order, disgorgement in the amount of $89,000, plus reasonable
interest thereon from October 1995 to the date of the Order in
the amount of $17,881.42, for a total amount of $106,881.42, to
the United States Securities and Exchange Commission. Such
payment shall be: (a) made by United States postal money order,
certified check, bank cashier's check or bank money order; (b)
made payable to the United States Securities and Exchange
Commission; (c) delivered by certified mail to the Comptroller,
Securities and Exchange Commission, 450 Fifth Street, N.W., Mail
Stop 0-3, Washington, D.C. 20549; and (d) submitted under cover
letter which identifies Respondent Boshnack as a respondent in
this proceeding, the file number of this proceeding, and the
Commission's case number (NY-6236), a copy of which cover letter
and money order or check shall be sent to Alexander M. Vasilescu,
Senior Trial Counsel, Northeast Regional Office, Securities and
Exchange Commission, 7 World Trade Center, 13th Floor, New York,
New York 10048.
E.Respondent Friedman pay, within three days of the entry of this
Order, disgorgement in the amount of $9,100, plus reasonable
interest thereon from October 1995 to the date of the Order in
the amount of $1,828, for a total amount of $10,928, to the
United States Securities and Exchange Commission. Such payment
shall be: (a) made by United States postal money order, certified
check, bank cashier's check or bank money order; (b) made payable
to the United States Securities and Exchange Commission; (c)
delivered by certified mail to the Comptroller, Securities and
Exchange Commission, 450 Fifth Street, N.W., Mail Stop 0-3,
Washington, D.C. 20549; and (d) submitted under cover letter
which identifies Respondent Friedman as a respondent in this
proceeding, the file number of this proceeding, and the
Commission's case number (NY-6236), a copy of which cover letter
and money order or check shall be sent to Alexander M. Vasilescu,
Senior Trial Counsel, Northeast Regional Office, Securities and
Exchange Commission, 7 World Trade Center, 13th Floor, New York,
New York 10048.
F.Respondent Miller pay, within three days of the entry of this
Order, disgorgement in the amount of $5,000, plus reasonable
interest thereon from October 1995 to the date of the Order in
the amount of $1,004, for a total amount of $6,004, to the United
States Securities and Exchange Commission. Such payment shall
be: (a) made by United States postal money order, certified
check, bank cashier's check or bank money order; (b) made payable
to the United States Securities and Exchange Commission; (c)
delivered by
certified mail to the Comptroller, Securities and Exchange
Commission, 450 Fifth Street, N.W., Mail Stop 0-3, Washington,
D.C. 20549; and (d) submitted under cover letter which identifies
Respondent Miller as a respondent in this proceeding, the file
number of this proceeding, and the Commission's case number (NY-
6236), a copy of which cover letter and
money order or check shall be sent to Alexander M. Vasilescu,
Senior Trial Counsel,
Northeast Regional Office, Securities and Exchange Commission, 7
World Trade Center, 13th Floor, New York, New York 10048.
For the Commission, by its Secretary, pursuant to delegated
authority.
Jonathan G. Katz
Secretary
NEWS DIGEST
COMMISSION BARS IRA A. BOSHNACK AND ANDREW S. FRIEDMAN, FORMER
PRINCIPALS AT STRATTON OAKMONT, INC., AND DOUGLAS C. MILLER, A
FORMER REGISTERED REPRESENTATIVE ASSOCIATED WITH STRATTON, AND
ORDERS OTHER REMEDIAL RELIEF.
The Commission settled public administrative and cease-and-desist
proceedings pursuant to Section 8A of the Securities Act of 1933
("Securities Act") and Sections 15(b), 19(h) and 21(C) of the
Securities Exchange Act of 1934 ("Exchange Act"), against Ira A.
Boshnack and Andrew S. Friedman, former principals at Stratton
Oakmont, Inc., the now defunct former registered broker-dealer,
and Douglas C. Miller, a former registered representative at
Stratton. Without admitting or denying the Commission's
findings, Boshnack, Friedman, and Miller consented to the entry
of an Order finding that they each participated in a scheme to
fraudulently pass the Series 7 and/or Series 24 licensing exams
administered by the NASD, and, as a result, they willfully aided
and abetted and caused violations by Stratton of Section 15(b)(7)
of the Exchange Act and Rule 15b7-1 thereunder. The Order
further finds that Boshnack and Friedman willfully violated
Section 17(a) of the Securities Act and Section 10(b) of the
Exchange Act and Rule 10b-5 thereunder, by making baseless price
predictions to customers and unauthorized trades in customer
accounts. The Order bars Boshnack, Friedman and Miller from
associating with any broker, dealer, investment company,
investment adviser or municipal securities dealer, directs them
to cease and desist from committing or causing any violations and
future violations of the above provisions, and directs them to
each pay disgorgement and interest: Boshnack, $106,881.42;
Friedman, $10,928; and Miller, $6,004.
Alexander M. Vasilescu
NERO
(212) 748-8158
SERVICE LIST
Rule 141 of the Commission's Rules of Practice provides that the
Secretary, or another duly authorized officer of the Commission,
shall serve a copy of Order Making Findings And Imposing Remedial
Sanctions And A Cease-And-Desist Order on each person named as a
party in the order and their legal agent. The attached Order
Making Findings And Imposing Remedial Sanctions And A Cease-And-
Desist Order has been sent to the following parties and other
persons entitled to notice:
The Honorable Brenda P. Murray
Chief Administrative Law Judge
Securities and Exchange Commission
Mail Stop 11-6
450 Fifth Street, N.W.
Washington, D.C. 20549
Securities and Exchange Commission
Northeast Regional Office
7 World Trade Center
13th Floor
New York, New York 10048
Attn:Alexander M. Vasilescu
Senior Trial Counsel
Securities and Exchange Commission
Branch of Regional Office Assistance
Mail Stop 8-9
450 Fifth Street, N.W.
Washington, D.C. 20549
Attn:Jill M. Peterson
Senior Counsel
Richard Quadrino, Esq.
Quadrino & Schwartz
666 Old County Road
Suite 207
Garden City, New York 11530
Attorney for Ira A. Boshnack
Douglas C. Miller
817 Wilshire Court, Apt. C
Metairie, Louisiana 70003
Ira A. Boshnack
4400 West Sample Road
Buildings 136-208
Coconut Creek, Florida 33073
Andrew S. Friedman
42 Colgate Drive
Plainview, New York 11803
Richard Quadrino, Esq.
Quadrino & Schwartz
666 Old County Road
Suite 207
Garden City, New York 11530
Re:In the Matter of Ira A. Boshnack, Andrew S. Friedman & Douglas
C.Miller, Admin. Proc., File No. 3-9491
Dear Mr. Quadrino:
Please find enclosed an Order Making Findings And Imposing
Remedial Sanctions And A Cease-And-Desist Order ("The Order")
against your client, Ira A. Boshnack ("Boshnack") in the above-
captioned matter.
If you have any questions, or wish to discuss any aspect of the
proceedings, you may communicate with Alexander M. Vasilescu,
Senior Trial Counsel, at the Commission's Northeast Regional
Office, (212) 748-8158, 7 World Trade Center, New York, New York
10048.
Sincerely,
Jonathan G. Katz
Secretary
Enclosure
Mr. Ira A. Boshnack
4400 West Sample Road
Buildings 136-208
Coconut Creek, Florida 33073
Re:In the Matter of Ira A. Boshnack, Andrew S. Friedman & Douglas
C.Miller, Admin. Proc., File No. 3-9491
Dear Mr. Boshnack:
Please find enclosed an Order Making Findings And Imposing
Remedial Sanctions And A Cease-And-Desist Order ("The Order")
against you in the above-captioned matter.
If you have any questions, or wish to discuss any aspect of the
proceedings, you may communicate with Alexander M. Vasilescu,
Senior Trial Counsel, at the Commission's Northeast Regional
Office, (212) 748-8158, 7 World Trade Center, New York, New York
10048.
Sincerely,
Jonathan G. Katz
Secretary
Enclosure
Mr. Andrew S. Friedman
42 Colgate Drive
Plainview, New York 11803
Re: In the Matter of Ira A. Boshnack, Andrew S. Friedman & Douglas C.
Miller, Admin. Proc., File No. 3-9491
Dear Mr. Friedman:
Please find enclosed an Order Making Findings And Imposing
Remedial Sanctions And A Cease-And-Desist Order ("The Order")
against you in the above-captioned matter.
If you have any questions, or wish to discuss any aspect of the
proceedings, you may communicate with Alexander M. Vasilescu,
Senior Trial Counsel, at the Commission's Northeast Regional
Office, (212) 748-8158, 7 World Trade Center, New York, New York
10048.
Sincerely,
Jonathan G. Katz
Secretary
Enclosure
Mr. Douglas C. Miller
817 Wilshire Court
Apartment C
Metairie, Louisiana 70003
Re: In the Matter of Ira A. Boshnack, Andrew S. Friedman & Douglas C.
Miller, Admin. Proc., File No. 3-9491
Dear Mr. Miller:
Please find enclosed an Order Making Findings And Imposing
Remedial Sanctions And A Cease-And-Desist Order ("The Order")
against you in the above-captioned matter.
If you have any questions, or wish to discuss any aspect of the
proceedings, you may communicate with Alexander M. Vasilescu at
the Commission's Northeast Regional Office, (212) 748-8158, 7
World Trade Center, New York, New York 10048.
Sincerely,
Jonathan G. Katz
Secretary
Enclosure